From the beginnings of the Nearshore industry more than twenty years ago, the debate about whether it is better to buy, build or partner in Nearshore markets has raged. Context, meaning the size of the company, the core services it provides and the length of time it needs services are all aspects that must have their say in the conversation. But at its core, the question to buy, build or partner is the question of scale, both in terms of staff and competencies, and growth.
In the last year, the Nearshore world has seen a surge in companies taking decisive action to buy a solution to its problem. As reported on by Nearshore Americas, M&A activity rose sharply the pandemic caused cracks and fissures to show in some organizations and in certain sectors. Companies wanted to acquire knowledge, technology and geographical diversification in the wake of the disruptive – and industry-changing – Covid-19 impact.
“The landscape is extremely fragmented and it’s ripe for investment, whether it’s larger companies looking to extend their footprint more quickly or leveraging their combined scale to drive synergies,” Shirley Hung, vice president of Everest Group, said at the time.
Anurag Kumar, managing director of the Nearshore region at Improving, and former CEO and co-founder of iTexico, is a self-described “product of outsourcing” who arrived to the US as a software developer for Tata Consultancy Services in the early 80s. As Kumar told Nearshore Americas in a recent interview, the outsourcing world has seen constant evolution over the last four decades, and when Kumar originally expanded into Mexico where talent “was really good, cost was competitive, and there was this attraction of the time zone proximity” convincing clients of the viability was still a problem. Now, however, the Nearshore is matured and more inviting than ever, it’s clear to the veteran IT professional that some fundamentals remain the same. And some questions continue to be asked.